Crypto Czar: Smart Contracts Help Regulation

Valerie Szczepanik is a longtime staffer at the US Securities and Exchange Commission. She was recently named the commission’s “Senior Adviser for Digital Assets and Innovation” which led to being called the “crypto czar.”

During the SINET Innovation Summit in New York, Szczepanik expressed her thoughts on the SEC plans to oversee cryptocurrencies and initial coin offerings (ICOs):

“ICOs are a relatively cheap and frictionless way to raise a whole lot of money with a liquid secondary market.”

However, she also acknowledged the fact that the companies that run these ICOs don’t really do much in protecting investors from threats like fraud or cyber security attacks.

The US SEC has been actively warning the public about ICO scams to help mitigate the risks but Szczepanik assured the crypto community that the commission wants to help crypto companies:

“We’re not going to do the innovating for people. But we want people to come and propose solutions they want to accomplish.”

Szczepanik believes that the regulatory problems in the crypto space can be solved with blockchain technology, specifically smart contracts. Crypto companies offering tokens can incorporate smart contracts in the tokens—stating the rules about who can go about exchanging them.

“It will be relatively easy to program these rules into smart contracts and DLT technology—but technologists need to talk to regulatory attorneys,” said Szczepanik.